Sanitation district agrees to end litigation, pay fine
August 3, 2016
The South San Luis Obispo County Sanitation District board announced Wednesday that the state has agreed to settle litigation and permit the district to pay a $1.19 million fine levied because of a 2010 sewage spill. As part of the negotiations, the state has agreed to allow the sanitation district to spend approximately $550,000 of the fine on plant repairs and environmental projects.
Arroyo Grande Mayor Jim Hill, who ran for office on a platform of ending the sanitation district’s costly legal battle, took a seat on the sanitation district board in 2015 and began pushing for settlement negotiations.
“Getting out of the litigation is a success and in the best interest of the district,” Hill said. “It is very satisfying to me to finally get this done.”
The sanitation district board is comprised of three board members, one from Arroyo Grande, Oceano and Grover Beach. The current board members include Hill, Grover Beach Mayor John Shoals and Oceano Community Services District President Mary Lucey.
On April 20, 2012, after the Central Coast Regional Water Quality Control Board determined the 2010 spill was the result of mismanagement by former plant administrator John Wallace, the state proposed a settlement that included a $400,000 fine and the requirement for the district to spend $375,000 on specific plant upgrades.
However, a month later, the three sanitation district board members at the time, Oceano Community Services District President Matt Guerrero, Grover Beach Councilman Bill Nicolls and Arroyo Grande Mayor Tony Ferarra, rejected the state’s settlement offer in closed session.
Instead, the sanitation district board decided to file suit against the state in a battle board members did not anticipate winning.
Since then, the sanitation district has paid about $850,000 to Wallace’s engineering firm, the Wallace Group, and a team of lawyers to argue against the allegations of mismanagement and the proposed fine.
After the sanitation district filed a lawsuit against the state in a later attempt to battle the fine, the state pulled its offer to allow the sanitation district to use a portion of the fine for repairs.
Then in December, Hill asked staff to work to settle the fine and negotiate a settlement that would again allow the sanitation district to spend a portion of the fine on plant upgrades.
“In hind sight, our predecessors should never had sued, they should have just paid the fine,” Hill said.